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New Mexico Legislature Begins, Prioritizing Economic Recovery

The New Mexico legislature meets this week to begin a 60-day session. The state continues to have a Democratic trifecta in the governor’s office and majorities in both state legislative chambers.

The 2021 legislative session will be held virtually and the Roundhouse will be off limits to the public and lobbyists for the entire 60-day session. The House and Senate will adopt specific rules for how committees will meet once the session begins.

GOV. GRISHAM PRIORITIES
New Mexico Gov. Michelle Lujan Grisham has a long list of priorities to help the state recover from the COVID-19 pandemic. Grisham supports creating a clean fuel standard to reduce emissions from the transportation sector. She also plans to legalize adult use of recreational cannabis to establish a new revenue source, similar to Oklahoma.

Additionally, Grisham will schedule a special election to replace Rep. Deb Haaland, who was selected by President Biden as Secretary of Interior. Under New Mexico law, the state central committees of the Democratic and Republican parties will choose nominees. Haaland does not have to give up her seat until she is confirmed by the Senate.

OIL & GAS IMPACT ON STATE BUDGET
New Mexico, like Texas and Colorado, ended 2020 with a better budget picture than expected. The state budget is down by almost $150 million and the planned 5% cut for state agencies will no longer be needed.

The 2020 loss in gross tax revenue from oil and gas drilling will be an estimated 7%. A September report estimated declines of 13-30%.

The BLM New Mexico state office raised nearly $4 million with a lease sale of nearly 7,000 acres on January 14. Around half the revenue will go to the states (New Mexico, Texas, Oklahoma and Kansas) and the rest to the U.S. Treasury.

A bill pre-filed in the New Mexico Senate seeks to add new clauses to New Mexico Oil and Gas Act relating to water usage in fracking. It could also change the response and penalties for spills to ensure more compliance. The bill would increase tracking of oil and gas activities and the composition of materials in produced water.

PESA will continue to keep its membership updated on New Mexico’s state actions related to the energy industry. If you would like to engage on these issues, please reach out to Tim Tarpley, Vice President Government Affairs. 

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